aib group plc · greater clarity on the group's future capital policy could also inform this...

AIB Group PLC

Primary Credit Analyst:

Letizia Conversano, Dublin 353 1 568 0615; [email protected]

Secondary Contact:

Anastasia Turdyeva, Dublin (353) 1-568-0622; [email protected]

Table Of Contents

Major Rating Factors

Outlook

Rationale

Related Criteria

Related Research

WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 30, 2019 1

AIB Group PLC

Major Rating Factors

Issuer Credit Rating

BBB-/Stable/A-3

Strengths: Weaknesses:

• Stable franchise in Ireland, with a high market share

across banking business lines

• Strong capitalization

• Stable deposit base, with very low concentration risk

and high current account balances

• Asset quality that continues to be weaker than that

of international peers

• Exposure to macroeconomic uncertainty in both the

U.K. and Ireland following the U.K.'s referendum

vote to leave the EU

• Increasing pressure on earnings due to the low

interest rate environment and necessity to improve

cost efficiency to maintain adequate profitability


Outlook

AIB Group PLC (non-operating holding company)

The stable outlook reflects S&P Global Ratings' expectation that AIB will continue to proactively reduce its

non-performing loans (NPLs) and maintain its domestic market position over the two-year outlook horizon. We

also assume that the recent change in the senior leadership team will not lead to a material shift in strategy or risk

appetite.

We could raise the ratings over the next 12-24 months if AIB improves its returns from both its domestic and

international operations, while maintaining its risk appetite. Less likely, we could also raise the ratings if AIB

reduces NPLs to align with higher rated peers, while maintaining its current capital strength.

We are unlikely to lower the ratings at this time, but we could consider doing so if AIB adopted a more aggressive

capital policy than we assume, or asset quality weaknesses re-emerged.

Allied Irish Banks PLC (operating company)

The stable outlook reflects that on AIB Group PLC.

We could also raise the ratings on Allied Irish Banks PLC over the next 12-24 months if the group makes more

substantial progress than expected in terms of minimum requirement for own funds and eligible liabilities (MREL)

issuance. This would lead us to raise the ratings if its additional loss-absorbing capacity (ALAC) buffer exceeds our

8% threshold for two notches of ALAC support within the long-term rating, and we expect this to remain the case.

Greater clarity on the group's future capital policy could also inform this analysis.

Rationale

The ratings reflect a banking group that has achieved a material recovery in its credit profile since its full

nationalization in 2011. It has done so by deleveraging, and improving its management, amid the Irish economy's brisk

recovery. The Irish government has maintained its equity stake of just over 70%, following a successful IPO in

mid-2017, but we assume this stake will gradually decrease.

Indicative of AIB's reduced scale is that its net loan book of €60.9 billion at June 30, 2019, is less than half what it was

at year-end 2008. The group has preserved its high and resilient market share across Irish banking, but has relatively

limited international diversification. As a result, our ratings on AIB broadly reflect our view of Irish banking in general,

so the 'bbb' Group SACP is the same as the anchor for a bank operating in Ireland.

The still-high stock of NPEs, relative to other "national champion" regional banks, remains a key rating constraint for

AIB. Its strong capitalization partially offsets this. We expect AIB will continue focusing on working out its NPEs, even

after achieving the 5% target NPE ratio, expected by year-end 2019. Nevertheless, the NPE stock's performance in


AIB Group PLC

2020-2021 will largely correlate to the domestic macroeconomic environment after the U.K. leaves the EU.

Although there might be a more substantial return of capital to shareholders in 2020--contingent upon achieving its 5%

target NPE ratio--we anticipate that our risk-adjusted capital (RAC) will remain above 10% by year-end 2021. This

mainly follows our view of AIB's more cautious risk-appetite and mild balance-sheet growth, on the back of a highly

competitive domestic mortgage market, a weakening external environment, and Brexit-related uncertainty. Given this

unclear outlook, we potentially see some pressure on the group's earnings, absent a strong recovery in net loan

growth, improvement in fee and commission income, and a lower cost base.

We compare AIB to other rated Irish banks and some regional banks (not all "national champions") with a similar or

stronger economic and industry risk profile: for example, Bank Hapoalim B.M. (group SACP is 'a-'); CSOB ('a-'); Banco

de Sabadell S.A. ('bbb'), Caixabank S.A. ('bbb+'); CYBG plc ('bbb'), and Santander UK Group Holdings plc ('bbb+').

Anchor: Stable trends in Ireland's banking sector

The starting point for our ratings on AIB is its 'bbb' anchor, which principally captures our view of the risks in Ireland

given that its U.K. and other international lending activities are relatively modest (23% of gross loans as of June 30,

2019).

In our view, the economic risk trend in Ireland is stable. This reflects our assumption that Ireland's GDP growth will

remain brisk, which in turn will continue to feed through to further property price appreciation and reduction in

unemployment--all of which should help, at least in the short term, to improve the resilience of banks' balance sheets.

We assume that the era of household and corporate deleveraging is now largely over and we would need to see

evidence of a substantial further reduction in NPLs before we could consider an improved assessment. Even then,

ongoing house price inflation and any potential Brexit-related risks to Ireland--with the U.K. being its closest trading

partner--may also cause us to delay a stronger assessment.

The industry risk trend is also stable. We assume that our metric of deposits to loans will remain above 75% on a

sustainable basis as lending growth revives, and that regular access to wholesale markets will persist. We also assume

that net interest margin pressure will not emerge sufficiently to weigh on statutory earnings. Banks will likely continue

to invest in their operations and digital capability. Finally, we also assume that the longstanding government stakes in

a large part of the banking system will only be reduced to zero during the 2020s.

Table 1

AIB Group PLC Key Figures

--Year ended Dec. 31--

(Mil. €) 2019* 2018 2017 2016

Adjusted assets 94,929.0 90,854.0 89,493.0 95,230.0

Customer loans (gross) 62,518.0 62,907.0 63,338.0 65,228.0

Adjusted common equity 8,530.0 8,366.0 8,068.0 7,248.0

Operating revenues 1,378.0 2,765.0 2,879.0 2,670.0

Noninterest expenses 795.0 1,581.0 1,574.0 1,489.0

Core earnings 475.3 1,215.5 1,268.4 1,192.3

*Data as of June 30.


AIB Group PLC

Business position: Largely a pure play on the Irish economy

AIB has a stable franchise in Ireland, across banking business lines. We observe high market shares, revenue stability,

and a clear strategy that is not overly aggressive. We believe that these factors are broadly captured by our view of

Irish banking in general.

AIB benefits from resilient domestic franchises and high market share across all retail and commercial banking lines in

Ireland. For example, the bank states that its stock shares of personal current accounts and business current accounts

are 37% and 44% respectively; its share of mortgage market new lending flow as of June 2019 was 31%. AIB also

states that it has 2.4 million domestic personal and small business customers, though this is a lot fewer than some

international peers. The bank's international activities are fairly limited and mainly constitute its mid-markets business

banking operation in Great Britain, a full-service bank in Northern Ireland, and a useful acquisition finance franchise,

which has proven resilient.

AIB's reduced scale (see chart 1) reflects the bank's decade-long deleveraging, which has been sharper than that of

peers. We believe that the decline in the net loan book has broadly reached its end and now expect it to likely start

increasing from 2020. We believe that there will be less pressure on large NPE disposals, following the achievement of

the 5% NPE target ratio. Nevertheless, the pace of the net loan growth will likely depend on how Brexit will finally

affect the Irish economy and, therefore, the demand for loans.

We expect further substantial NPE disposals in second-half 2019--possibly from €600 million-€1 billion--and the

macroeconomic uncertainty around Brexit to weight on AIB's portfolio size in 2019.

Chart 1

Revenue by business line has been reasonably diverse and revenues have been stable in recent years (see chart 2).

Still, approximately 76% of the group's revenues are interest-sensitive, and the proportion of more resilient fees and


AIB Group PLC

commissions is lower than what we typically see at some other national champions'. Growth in other income,

however, might be difficult, similar to banking trends in general.

This revenue-structure might pose the group's earning-generation capacity at risk, in a prolonged low interest-rate and

highly competitive environment, absent a strong loan growth or effective cost savings.

Chart 2

On April 18, 2019, AIB announced the acquisition of 95.9% of Payzone, a leading Irish fintech payments business.

Although we don't expect this transaction to translate in significantly higher revenue flow in the near term, we

positively see the deal in the context of AIB's strategy to continue to evolve its customer experience and product

proposition. We understand that AIB's mobile app has received a positive response in the domestic market, with more

than 1 million active users as of June 2019.

In February and March this year, Colin Hunt, previously Wholesale & Institutional Banking divisional CEO; and Donal

Galvin, previously deputy CFO and group treasurer, were appointed CEO and CFO, respectively. The

government-imposed cap on senior management remuneration is believed to be a factor of the departure of the

previous top management.

This development highlights the risk that, while the ongoing government ownership is in of itself not a credit negative,

it is nevertheless an impediment to AIB's growth plans.

The quality, stability, and execution capabilities of management are important considerations in our ratings analysis,

particularly in the context of AIB's ownership structure. We currently think it unlikely that the CEO change will result


AIB Group PLC

in a material shift in the strategy.

A number of key publicly stated financial targets might prove ambitious, in our view, given the weak external

environment, low interest rates, and increasing regulatory costs:

• Net interest margin of 2.4% plus (a reported 2.46% for the first six months of 2019);

• Cost-to-income ratio of below 50% (54% on a reported underlying basis in the first half of 2019); and

• A return on tangible equity above 10% (a reported 7.9% in the first half of 2019).

We see these targets as hard to be met in case of a no-deal Brexit.

However, we view the new management's public commitment to continue to improve efficiency, amid wage inflation

and increasing regulatory costs, as a credit positive. In this respect, AIB recently announced a hiring freeze for 2019.

Table 2

AIB Group PLC Business Position


(%) 2019* 2018 2017 2016

Total revenues from business line (currency in millions) 1,412.0 2,888.0 2,959.0 2,955.0

Commercial and retail banking/total revenues from business line 88.0 85.9 85.4 81.5

Trading and sales income/total revenues from business line (3.4) 0.2 3.3 2.4

Insurance activities/total revenues from business line 2.0 1.6 0.8 0.8

Asset management/total revenues from business line 0.0 0.0 0.0 0.0

Other revenues/total revenues from business line 13.5 12.3 10.5 15.3

Investment banking/total revenues from business line (3.4) 0.2 3.3 2.4

Return on average common equity 5.4 8.2 8.6 N/A

*Data as of June 30. N/A--Not applicable.

Capital and earnings: Medium-term capital return plan will be a bigger driver than NPL reductions

We project AIB's risk-adjusted capital (RAC) ratio will remain above our 10% threshold for a strong assessment

through end-2021. We calculate AIB's RAC ratio at 12.5% at Dec. 31, 2018, up from 12.1% the year before. We assume

this metric will be about 13% at year-end 2019, before falling back toward the 10% threshold in 2020, on the

assumption that capital is returned to shareholders.

We base our RAC projection on the following key assumptions:

• Lower pre-provision income than the €1.2 billion we calculate by our measures in 2018, as we assume a slightly

decreasing net interest margin,, and ongoing investment in the business and operational resilience;

• The loan loss rate to pick up to a more normalized 20-25 basis points (bps) in 2020, from about 3 bps in 2019; the

20-25 bps range assumes an orderly Brexit, but we could revise this upward in case of a disruptive no-deal Brexit;

• Modest impact from exceptional items, following the €43 million provisioned for fines in June 2019;

• A projected 50% payout ratio, in addition to a possible special capital distribution in 2020, compatible with a

targeted 13% CET 1 ratio; and


AIB Group PLC

• S&P Global Ratings-calculated RWA to be broadly flat in 2019, before rising by around 1.5% in 2020 and 2.4% in

2021, because we expect net loan growth to accelerate. We assume loan book growth of over 2% in 2020, but RWA

growth will be lower as NAMA subordinated bonds mature in that year.

We do not factor potential net new total adjusted capital (TAC) eligible AT1 issuance into our forecast, until

consummated.

The quality of capital is currently better than larger international peers; our ratio of adjusted common equity to TAC

was 94% at June 30, 2019.

AIB reported a regulatory fully loaded CET1 ratio of 17.3% on June 30, 2019. We assume that the ongoing NPE

reduction strategy will not negatively affect this measure.

On July 26, 2019, AIB announced that the ECB Targeted Review of Internal Models (TRIM) concerning the mortgage

portfolio model resulted in about €2.2 billion additional regulatory risk-weighted assets (90 bps on CET 1). We

understand that the review of the portfolio's corporate component is ongoing. Nevertheless, our view of AIB's

capitalization has not fundamentally changed. This is primarily because we base our assessment on our risk-adjusted

capital (RAC) methodology. Our RWAs factor in our views of risks per asset class and geography. Therefore, our

calculations do not rely on banks' internal models, which might vary widely from one institution to another and, in

many instances, result in very low risk weights. This is why our measure of capital, the RAC ratio, is well below the

bank's reported Tier 1 ratio, even post-TRIM.

Our assessment of capital and earnings also looks beyond the capital analysis and considers both the quality of

earnings and earnings capacity. We expect our calculation of AIB's earnings buffer, which measures the capacity for

pre-provision income to cover our estimation of normalized credit losses through the credit cycle, to be about 90 bps

in 2019-2021, which compares quite well.

Table 3

AIB Group PLC RACF [Risk-Adjusted Capital Framework] Data

(Mil. €) Exposure*

Basel III

RWA

Average Basel

III RW (%)

S&P Global

RWA

Average S&P

Global RW (%)

Credit risk

Government and central banks 17,268 200 1 465 3

Of which regional governments and local

authorities

7 0 0 0 6

Institutions and CCPs 8,459 2,050 24 2,544 30

Corporate 26,026 19,350 74 27,357 105

Retail 34,465 18,938 55 18,607 54

Of which mortgage 29,470 15,188 52 13,578 46

Securitization§ 555 63 11 183 33

Other assets† 6,061 5,300 87 9,403 155

Total credit risk 92,834 45,900 49 58,559 63

Credit valuation adjustment

Total credit valuation adjustment -- 400 -- 0 --


AIB Group PLC

Table 3

AIB Group PLC RACF [Risk-Adjusted Capital Framework] Data (cont.)

Market Risk

Equity in the banking book 818 313 38 6,519 797

Trading book market risk -- 375 -- 563 --

Total market risk -- 688 -- 7,081 --

Operational risk

Total operational risk -- 4,625 -- 5,513 --

(Mil. €) Exposure

Basel III

RWA

Average Basel

II RW (%)

S&P Global

RWA

% of S&P Global

RWA

Diversification adjustments

RWA before diversification -- 51,613 -- 71,152 100

Total diversification/concentration

adjustments

-- -- -- 3,992 6

RWA after diversification -- 51,613 -- 75,144 106

(Mil. €)

Tier 1

capital Tier 1 ratio (%)

Total adjusted

capital

S&P Global RAC

ratio (%)

Capital ratio

Capital ratio before adjustments 9,309 18.0 8,860 12.5

Capital ratio after adjustments 9,309 18.0 8,860 11.8

*Exposure at default. §Securitization Exposure includes the securitization tranches deducted from capital in the regulatory framework. †Exposure

and S&P Global Ratings’ risk-weighted assets for equity in the banking book include minority equity holdings in financial institutions.

‡Adjustments to Tier 1 ratio are additional regulatory requirements (e.g. transitional floor or Pillar 2 add-ons). RWA--Risk-weighted assets.

RW--Risk weight. RAC--Risk-adjusted capital. Sources: Company data as of Dec. 31, 2018. Source: S&P Global Ratings.

Table 4

AIB Group PLC Capital And Earnings


(%) 2019* 2018 2017 2016

Tier 1 capital ratio 18.0 18.1 18.0 16.2

S&P Global Ratings’ RAC ratio before diversification N/A 12.5 12.1 N/A

S&P Global Ratings’ RAC ratio after diversification N/A 11.8 11.1 N/A

Adjusted common equity/total adjusted capital 94.5 94.4 94.2 93.6

Double leverage N.M. 100.0 100.0 N.M.

Net interest income/operating revenues 76.2 75.9 73.5 75.4

Fee income/operating revenues 16.7 16.5 13.6 14.8

Market-sensitive income/operating revenues 1.8 1.0 4.0 6.0

Noninterest expenses/operating revenues 57.7 57.2 54.7 55.8

Preprovision operating income/average assets 1.2 1.3 1.4 N/A

Core earnings/average managed assets 1.0 1.3 1.4 N/A

*Data as of June 30. N/A--Not applicable. N.M.--Not meaningful.

Risk position: Ongoing decrease in impaired loans

We expect AIB to continue to make progress improving its asset quality but we doubt that its stock metrics will

approach the level of peers operating in countries characterised by similar economic risk (such as Spain, Israel, and


AIB Group PLC

U.K.) in the near term. Furthermore, adverse economic developments from a no-deal Brexit could weigh on AIB's NPE

stock performance in 2020-2021.

As of June 30, 2019, residential mortgages were the largest component of gross customer loans at 51%. Property and

construction is still an important element, at 12% of gross loans, which is higher than that of most peers (see chart 3).

Chart 3

Irish banks are required to use the European Banking Authority's (EBA) regulatory definition of NPEs for regulatory

reporting, EBA stress testing, and for capital planning. AIB reports that the EBA's measure of NPEs

post-implementation of IFRS 9 includes loans that are unlikely to pay, collateral disposals, and probationary period

loans. As of June 30, 2019, AIB reported an NPE measure of €4.7 billion, or 7.5% of gross loans. The reduction in

NPEs relative to €6.1 billion at December 2018 is partly due to the sale of a loan portfolio of about €1 billion on top of

case-by-case restructuring.

AIB stated that Stage 3 loans were €4.5 billion or 7.3% of gross loans at June 30, 2019. A broader analysis of asset

quality also captures Stage 2 loans. For AIB, total Stage 2 loans were €5 billion or 8% of gross loans at the same date.

These metrics are weaker than at BOI (see chart 4). Expected credit loss coverage of Stage 2 and Stage 3 loans was


AIB Group PLC

15.5%.

Our risk analysis also captures a potential nonfinancial vulnerabilities, such as those emanating from misconduct or

mis-selling issues. Rhe bank booked in the first half of 2019 a €43 million charge associated with customer redress on

the "Tracker Mortgage examination." Moreover, we will observe the extent to which the bank has beefed up its risk

management and compliance to prevent further occurrences.

Chart 4

Table 5

AIB Group PLC Risk Position


(%) 2019* 2018 2017 2016

Growth in customer loans (1.2) (0.7) (2.9) N.M.

Total diversification adjustment/S&P Global Ratings’ RWA before diversification N/A 5.6 9.2 N/A

Total managed assets/adjusted common equity (x) 11.2 10.9 11.2 13.2

New loan loss provisions/average customer loans 0.0 (0.3) (0.3) N/A

Net charge-offs/average customer loans 0.3 1.4 1.1 N/A

Gross nonperforming assets/customer loans + other real estate owned 9.8 12.4 18.8 24.6

Loan loss reserves/gross nonperforming assets 26.3 26.1 28.1 28.7

*Data as of June 30. N/A--Not applicable. N.M.--Not meaningful.

Funding and liquidity: Balanced profiles

We consider AIB's funding in line with the rest of the Irish banking system, and we expect this to continue.

AIB's funding profile benefits from the bank's strong domestic franchises and its limited reliance on short-term


AIB Group PLC

wholesale funding. Our calculation of AIB's stable funding metric of 123% at Dec. 30, 2018, supports this view.

AIB reported a loan-to-deposit ratio of 90% at Dec. 30, a level which has been consistent in recent years. Deposits are

largely sourced from retail customers and are granular in nature. Reflecting the strength of its domestic franchise,

current account credit balances within the Irish Retail & Commercial Banking division were a reported 35% of total

customer deposits at Dec. 31, 2018.

Our metric of broad liquid assets to short-term wholesale funding was an unusually high 172x at Dec. 30, 2018. This

reflects the relative absence of wholesale funding given AIB's multi-year deleveraging. In the long term, we expect the

bank's profile to move more in line with that of international peers.

Table 6

AIB Group PLC Funding And Liquidity


(%) 2019* 2018 2017 2016

Core deposits/funding base 88.4 90.2 87.6 79.7

Customer loans (net)/customer deposits 87.6 89.9 93.0 96.4

Long-term funding ratio 98.4 98.7 97.3 90.5

Stable funding ratio 125.9 123.4 123.0 119.8

Short-term wholesale funding/funding base 1.8 1.5 3.2 11.1

Broad liquid assets/short-term wholesale funding (x) 15.4 17.6 8.7 2.8

Net broad liquid assets/short-term customer deposits 30.7 28.5 28.7 26.4

Short-term wholesale funding/total wholesale funding 15.0 14.4 24.4 52.9

Narrow liquid assets/three-month wholesale funding (x) 30.1 35.3 10.2 4.0

*Data as of June 30.

Support: Our ALAC measure is rising

AIB completed a corporate reorganization in December 2017 that resulted in the creation of AIB Group PLC as the

group's listed holding company. AIB Group PLC is the ultimate holding company of the group that it heads, and is a

non-operating holding company (NOHC). We expect the NOHC to downstream issued debt and equity capital to

Allied Irish Banks PLC and that it will be the key vehicle for the group's issuance of long-term instruments designed to

absorb losses, whether on a going-concern or nonviability basis.

In March 2018 AIB Group issued its first senior unsecured MREL eligible instruments. Currently, combined issuance

totals about €3.3billion, out of €5 billion expected by January 2021.

Since mid-2018, we have incorporated one notch of uplift into the long-term rating on Allied Irish Banks PLC because

the group's ALAC ratio is above our 5.0% threshold, and because its approach to issuance is proactive.

We view the Irish resolution regime as effective under our ALAC criteria because it contains a well-defined bail-in

process under which authorities would permit nonviable systemically important banks to continue critical functions as

going concerns following a bail-in of eligible liabilities.

We include the majority of the legacy Allied Irish Banks junior and subordinated instruments in our ALAC assessment


AIB Group PLC

because, over our projection period, we believe they have capacity to absorb losses without triggering a default on

Allied Irish Bank's senior obligations (see table 6). On this basis, we calculate that ALAC was 5.5% of S&P Global

Ratings' RWAs at year-end 2018. We estimate this metric will remain above 5.0% at year-end 2021, in light of the

planned €5 billion MREL issuance in 2018-2021.

Table 7

Summary of ALAC Calculation As Of Dec. 31, 2018

(Mil. €) % of S&P Global Ratings' RWAs

A Adjusted common equity 8,366

B Hybrids in TAC 494

C (A+B) Total adjusted common equity 8,860 12.45

D TAC in excess of our 10% threshold 1,251

E ALAC-eligible instruments 3,020

o/w NOHC senior 1,656

o/w Dated subordinated 864

o/w Minimal equity content hybrids 0

o/w Other 500

F (=D+E) ALAC buffer 3,877 5.45

S&P RWA 71,152

Source: S&P Global Ratings database. ALAC--Additional loss-absorbing capacity. RWA--Risk-weighted assets. TAC--Total adjusted capital.

Additional rating factors: None

No other factors affect the ratings.

Group structure, rated subsidiaries and hybrids

We do not include notches for ALAC support in the ratings on NOHCs because we do not believe that their senior

obligations would continue to receive full and timely payment in a resolution scenario. As a result of this, we rate AIB

Group one notch below the 'bbb' unsupported GCP.

We rate the group's wholly owned U.K. subsidiary one notch below Allied Irish Banks PLC. This is because we do not

believe it demonstrates the characteristics of a core subsidiary as per our group rating methodology; it has yet to

demonstrate it can generate returns consistent with group targets and the group strategy vis-a-vis the U.K. is very

cautious. Furthermore, we regard its intrinsic creditworthiness as not as strong as its parent's, owing to its narrow

focus, offset by its robust level of capitalization at present.

We rate nondeferrable subordinated debt issued by Allied Irish Bank two notches below the Group SACP, reflecting

the debt's contractual subordination as a Tier 2 instrument and our view that the Bank Recovery and Resolution

Directive creates the equivalent of a contractual write-down clause. AIB Group has yet to issue similar debt but we

would likely rate similar issuance by AIB Group one notch lower, reflecting our view of structural subordination.

Resolution counterparty ratings

We set the 'A-/A-2' resolution counterparty ratings (RCRs) on Allied Irish Banks PLC one notch above its long-term

issuer credit rating. The RCRs also reflect our jurisdiction assessment for Ireland.


AIB Group PLC

An RCR is a forward-looking opinion of the relative default risk of certain senior liabilities that might be protected from

default through an effective bail-in resolution process for the issuing financial institutions. RCRs apply to issuers in

jurisdictions where we assess the resolution regime to be effective and we consider the issuer likely to be subject to a

resolution that entails a bail-in if it reaches nonviability.

Related Criteria

• General Criteria: Group Rating Methodology, July 1, 2019

• Criteria - Financial Institutions - General: Methodology For Assigning Financial Institution Resolution Counterparty

Ratings, April 19, 2018

• Criteria | Financial Institutions | General: Risk-Adjusted Capital Framework Methodology, July 20, 2017

• General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017

• General Criteria: Guarantee Criteria, Oct. 21, 2016

• Criteria | Financial Institutions | Banks: Bank Rating Methodology And Assumptions: Additional Loss-Absorbing

Capacity, April 27, 2015

• Criteria | Financial Institutions | Banks: Bank Hybrid Capital And Nondeferrable Subordinated Debt Methodology

And Assumptions, Jan. 29, 2015

• General Criteria: Methodology: Use Of 'C' And 'D' Issue Credit Ratings For Hybrid Capital And Payment-In-Kind

Instruments, Oct. 24, 2013

• Criteria | Financial Institutions | Banks: Quantitative Metrics For Rating Banks Globally: Methodology And

Assumptions, July 17, 2013

• Criteria | Financial Institutions | Banks: Banks: Rating Methodology And Assumptions, Nov. 9, 2011

• Criteria | Financial Institutions | Banks: Banking Industry Country Risk Assessment Methodology And

Assumptions, Nov. 9, 2011

• General Criteria: Use Of CreditWatch And Outlooks, Sept. 14, 2009

• Criteria | Financial Institutions | Banks: Commercial Paper I: Banks, March 23, 2004

Related Research

• Banking Industry Country Risk Assessment: Ireland, Dec. 17, 2018

• Various Positive Rating Actions Taken On Irish Banks On Improving Funding Profile, Dec. 17, 2018

• Allied Irish Banks PLC Upgraded To 'BBB/A-2' On Growing ALAC Buffer; Holding Company Ratings Affirmed;

Outlook Positive, July 10, 2018

• Merely A Win, No Grand Slam Glory For Irish Banks, March 26, 2018


AIB Group PLC

Ratings Detail (As Of August 30, 2019)*

AIB Group PLC

Issuer Credit Rating BBB-/Stable/A-3

Senior Unsecured A-3

Senior Unsecured BBB-

Subordinated BB

Issuer Credit Ratings History

17-Dec-2018 BBB-/Stable/A-3

12-Mar-2018 BB+/Positive/B

Sovereign Rating

Ireland A+/Stable/A-1

Related Entities

AIB Group (U.K.) PLC

Issuer Credit Rating BBB/Stable/A-2

Resolution Counterparty Rating BBB+/--/A-2

AIB Mortgage Bank

Senior Secured AAA/Stable

Allied Irish Banks PLC

Issuer Credit Rating BBB+/Stable/A-2

Resolution Counterparty Rating A-/--/A-2

Commercial Paper A-2

Senior Unsecured BBB+

Short-Term Debt A-2

Subordinated BB+

Subordinated D

*Unless otherwise noted, all ratings in this report are global scale ratings. S&P Global Ratings’ credit ratings on the global scale are comparable

across countries. S&P Global Ratings’ credit ratings on a national scale are relative to obligors or obligations within that specific country. Issue and

debt ratings could include debt guaranteed by another entity, and rated debt that an entity guarantees.


AIB Group PLC


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